Friday, April 24, 2009

A great product may just get turned into a hopeless also ran in the market place if it is not packaged right. Surely that’s reason enough to consider this aspect of your marketing program very seriously

This year, PepsiCo has found a mantra to breathe new life into its beverage category. The buzz word is “Refresh Everything.” With this focus, the company plans to reinvent the brand and fill it with the spirit and optimism of youth. Massimo d’ Amore, CEO, PepsiCo North America Beverages, said, “Today, people want beverages to refresh more than their taste buds... this is what our brand reinvention strategy is all about and we’re introducing new identities, new packing and holistic marketing campaigns designed to inspire people of all generations,” as according to them, their beverages have always been at the centre of popular culture, where they have energized new generations for years. The 60-second “Pepsi Pass” video on You Tube takes the winning mantra forward by claiming “Every generation refreshes the world… now it’s your turn.”

With a series of new advertisements & new packaging, the company marched ahead on this exciting plan, in the beginning of this year. It refreshed (read: modified) a lot of things; like refreshed the Pepsi logo, the Mountain Dew font and the packaging of its premium category orange juice Tropicana, among other things. The company invested $35 million to roll out this new look of Tropicana. Now, instead of its trademark “orange-with-the-straw” image, the Tropicana carton featured a glass full of an orange juice, while the cap was designed to look like an orange. The result – after the launch of the packaging on January 1, 2009, the sales of Tropicana had plummeted by 20% by the end of February.

It couldn’t get more shocking. A brand that was nurtured and grown for 30 years lost one-fifth of its customers in fewer than 60 days. To make matters worse, not just did Tropicana’s market share drop, but that of its competitors increased; i.e. Coca Cola, Minute Maid and various other brands, including private-label products, posted a double digit unit sales increase during this period! So what went wrong? In its bid to reinvigorate the brand and make new emotional connections, the company lost sight of the most important factor – customer experience. That is, the shopping experience of the customer. The new package design, though classy, actually confused the customer. The new design lacked the distinctive personality of the “Orange-with-the straw” image. Maybe it was not classy, maybe a lot of people didn’t care much about it, yet the “Orange-with-the-straw” made the carton stand out on the shelves of supermarkets and made it easier for the customer to grab the juice of their choice. The new design could not stand out and made the brand look generic. No one in their wildest dreams could predict that a change in packaging could cause such a steep and unthinkable fall in sales. The company, of course, has immediately discontinued the new packaging & brought back the original, but this big goof-up definitely gets one thinking.

The silent salesmanVery often, “packaging” is referred to as the silent salesman – speaking volumes, without saying a word! Packaging conveys a very strong marketing message. It’s packaging that a lot of seasoned marketers are turning to, during these times to boost sales. Frito-Lay’s new Smart Food popcorn is now coming in a smaller pack – as research revealed, women (who are its target customers) preferred smaller, portioned packaging for their snacks. Pepsi is bringing back its retro-style packing for Pepsi Cola and Mountain Dew – reminiscent of the 60’s & 70’s. Starbucks is planning to roll its ice-cream into grocery stores this summer and its packaging for the new super premium flavors emulates the company’s iconic white cup – so that loyal customers can recognize it in a glance. Mango Frooti is going in for innovative packaging to help increase sales this summer. It’s now offering a Frooti devil pack and a Frooti cupid pack – to make it look more contemporary and appealing to the youth and to enhance its image. Sprite also comes in a smaller version called Sprite Xpress now – in sync with the on-the-move lifestyle of the youth. Women’s Horlicks was the best ever launch for GlaxoSmithKline last year – primarily due to the unique design of the bottle, which was shaped like a woman’s form – and woman loved it! Old brands need to change with the times to remain relevant to the new generation & a new packaging helps in doing just that. Old brand Sunsilk became youthful & trendy last year with its new packaging.

Earlier considered as a protective cover, packaging today has become the key differentiator of brands. A new packaging always manages to draw back the attention of the customers towards itself. If it’s good, they always pause & give the brand a second look. Now you know why, after a break–up, your girlfriend suddenly changed her hair colour & cut – for that second look! Always repackage – to appear more attractive to the user! It’s no surprise then that while seven years ago, organizations were spending approximately 5-8% of R&D budget on packaging – today the number has risen to 15-20%. Even our political parties are getting all dolled up for the coming elections – each one dressing up their candidates & plastering their images all over the city. Each one is trying their best to package their party with smiling images of their politicians.

Packaging fightsWe may not realize it, but a lot of marketing wars are fought by packaging. It fights competitors. Sony has been the undisputed leader in the electronics market, but LG & Samsung managed to turn the tide in their favour through innovative design. Nokia felt the heat when Motorola dressed up its mobile phone in a trendy Moto Razr avataar. Horlicks got more visibility and higher shelf appeal with its new & trendy packaging & kept competitors at bay. Cobra Beer now knows that to win market share, it too needs to pack its beer in cans – for that’s how consumers prefer it & United Breweries (its competitor) is already doing it – and consumers are also picking it up faster than Cobra.

It fights controversy. Known for destroying the environment wherever it goes, Coca Cola decided to wear its commitment to the environment on its sleeves – literally. Most of its packaging is 100% recyclable and it now also has a “Recycle Now” featured prominently on all its products – to emphasis that its packaging is recyclable.

McDonald’s wants to remove its “bad food” tag and show its consumers its healthy side and who else to help it – but packaging. Through an initiative it has launched in 2008, the brand will ensure that its packaging features the brand’s food quality story – another way of reinforcing its quality. Pret–a– manger of UK has been doing this for years now. The packaging of its sandwiches, juices, cakes, salads, all feature short sensitive stories, bringing out Pret’s commitment towards quality and freshly made food as compared to others. A lot of people started preferring Pret to McDonald’s after this. Now Mc- Donald’s is probably trying to woo them back and make them say, “I’m loving it” – even more loudly. After worms were found in chocolate bars of Cadbury Dairy Milk, the company decided to start a campaign called “Project Vishwas” and the first thing it did was to change its packaging. The old packaging would remind consumers of the worms, so it needed a new look.

It fights branding wars. Almost all comparative advertisements use the packaging of competitors to prove their point. Be it the Surf-Ariel wars, or the Pepsi-Coke ones. This time too, Coke’s brand Powerade is using its competitor Gatorades’ packaging to fight the war. To prove that Gatorade provides half the benefits of Powerade, hoardings across US feature half the bottle of Gatorade labeled as the “incomplete sports drink.” The iconic packaging of Gatorade is instantly recognizable. With 75% market share, a very loyal following & a packaging loved by all, Gatorade might just win this battle too.

Packaging should reflect the culture and the times. Today, it’s more grab-&- go. No wonder that restaurants are becoming more automobile friendly and automobiles, more drive-in-eat-in-car friendly. McDonald’s & Burger King now package their take-away food in cups that can fit car cup holders. Dashboard dining, i.e. sales at the drivethrough window now account for at least half of all the fast food restaurant’s sales. The power of packaging cannot be denied.

The Package is the productYou may work hard on the quality, the price, the distribution of your brand, but don’t ignore packaging. It’s a powerful tool. There is no better proof than “bottled water.” It is the ultimate when it comes to a commodity product and with more than 400 brands fighting for shelf space, the only attribute that separates them is packaging.

Packaging influences everyone – when children were given milk & carrots in packets with a McDonald’s logo on it, they found it more tasty!

A product is no good today till it’s packaged well. So if you really want the consumer to grab your brands – make sure it’s power-packed.

Thursday, April 9, 2009

As technology radically transforms interpersonal communication, the very tenets of marketing are getting redefined...

Aircel seems to have flooded the markets with its red and blue hoardings and kiosks dotting the whole city. They plastered Delhi with Mahendra Singh Dhoni’s smiling face, they stole the front page of the Times of India and changed it to “Move on India”. On 21st March, apart from TOI, Aircel had literally hijacked all Radio Channels & TV Channels with its advertisements. Many have used such “Ambush” marketing techniques earlier, however this time, Aircel did something else too. This Apollo Group-promoted brand went and connected itself with the youth – and where else to go other than Facebook. Aircel launched a voice message application on Facebook, which allowed friends to leave each other voice messages instead of just text messages. Within no time, it got 190 users to sign up for its voice mail application. Social networking sites are turning out to be lucrative options, where marketers can focus on their target groups, and that too, at very cheap rates.

Lets Face it!Facebook has become a place where every college kid now hangs out. Its stickiness has improved with a user spending 190 minutes on an average on the site. Originally developed for college and university students, where you could log in only if you had a college e-mail id, Facebook is available to anyone with an email address today. So now there is an increase in the users of the 12-17 and 35+ demographic. So these social networking sites are attracting a lot of marketers, especially those who want to target the youth, for it’s the young who have typically more free time to spend on a social networking site. So if you can do something interesting & creative, which catches the fancy of young minds, you can create a “friendly buzz” about your brand; something very necessary for a brand’s survival and growth.

In Australia, when Nestle wanted to launch its new Kit Kat Chunky product targeted at teenage boys, it decided to not use any traditional media. According to its head of campaign marketing John Broome, five years ago, the advertising campaign would have included television, radio and outdoor; but today, things have changed. This time, the campaign includes a multi-player online game, online videos, mockumentaries (mock documentaries!!) and a mobile component to the website. With teenage boys spending, on an average, 13 hours a week playing games online, this was the perfect way to reach them. The advantage – if they liked you, they would refer you to their friends, who would like you too – ‘coz their friends told them so. Though overall, Nestle spends about 10% of its media budget on the internet, but this time, of the $1 million kept aside for launching Kit Kat Chunky, it decided to spend 70% of the amount on the internet. Nano, the latest offering from the Tatas to hit the Indian roads, broke new grounds in design, engineering and production processes. Now it’s using innovative ways to market and promote this unique Rs.1 lakh car. Unlike most small cars, Nano won’t advertise on TV. It will instead focus on online Nano games, Nano chat rooms, Nano pop-ups and even enter into a conversation with young users on Facebook, Orkut and blog spaces. Nano wants to be synonymous with anything “small, cute and brief” and it’s using the internet to help build this buzz about its brand, and probably this time, it’s not gone wrong, for the networking sites triggered a gushy response from people all over the world, asking for a similar car in their land too!

P&G, the world’s biggest advertiser, created a page on MySpace called “Miss Irresistible” to help market its Crest toothpaste. This way, it could connect with its users, potential users and along the way, gather market research. According to Wall Street, when the world’s biggest advertiser turns towards a new medium, a whole lot of others are bound to follow

If you want to market to the kids, you need to know where they live. When the giant US retailer Target wanted to promote its “back toschool” merchandise, it decided to sponsor a page on Facebook. No advertising of merchandise here – just conversing with the young people and getting to know them. The page was given a theme of “Dorm Survival Guide” where students were given advice on how to design their dorms, how to cook, how their furniture should match their personality – so there was a personality test too; and of course, it said how pillow cases, and comforters (available at Target too) could help make them more comfortable in their dorms. Initially, they included photos of dorms designed by designers, but you could upload your dorm pics too. It attracted more than 7,000 members, lots of photos, and lots of positive discussions about the brand. Target realised that on Facebook, you don’t sell first – you talk first. So it kept all discounts, promotions et al away from its Facebook page – and it worked. The community liked it.

JP Morgan Chase decided to market its credit cards with the help of Facebook and not its own website. To market to young people, you need to like them, and behave like them. You need to be relevant to their life. Its Facebook page gave advice to youngsters on how to use credit wisely, apart from earning points for joining Chase subgroups, et al.

Burger King created a page on MySpace and has more than 12,000 “friends”, who can post comments and get to know of various deals et al.

If you thought these social networking sites are being used by companies to peddle their goods, you are wrong. From Microsoft to Goldman Sachs to Deloitte, everyone is on these, building their own alumi networks to encourage their old employees to join back. Deloitte found that 20% of its new recruitments consisted of boomerangs – i.e people who had worked with it earlier. In today’s times, “Boomerangs” are a blessing. They know you, so it costs less to train them and they hit the ground running. Let’s face it – it’s difficult to stay away from Facebook & other such sites.

What are you doing now?It seems like a mundane question – something you casually ask friends when you meet up – but it seems to have taken “netizens” by storm. This community is always looking for something exciting and new. Today it’s so very outdated to “Blog”. For netizens “it’s so 2004!” The new, fun and interesting buzz about the wires seems to be to “twitter”. Twitter. com seems to be the place where all the action is. With 1 million users and approximately 3 million messages posted daily, it seems to be the best combination of SMS and blogging. Its a simple concept – sounding ridiculous to many (especially the not-soyoung!). It was made with the idea of letting your friends and followers know what you are doing now – but it’s catapulted into a rage for its over simplicity and convenience. You can “twitter” with your mobile or computer and know what your friends are doing now!

At first it sounds silly – why would anyone be interested in what you are doing? Think abut it; when Dalai Lama “twittered”, it took His Holiness just two days to garner more than 20,000 followers. People twittered, “I’m sure HH will be as inquisitive about technology as he has been over the past 14 reincarnations.” Of course, it was soon discovered to be a hoax and temporarily suspended. Incidentally, “God” and “Satan” also have their accounts on Twitter. They are yet to be verified for authenticity, but marketers world over are not leaving this interesting field to try their luck with increasing market share. After all, Barack Obama “tweeted” to encourage people to vote in the US election – and won!

Huge brands are using Twitter to get close to customers like “Whole Foods Market asks its friends & followers what they like to read & watch and informs them of various events coming up.” Samsung uses Twitter to update you on latest company news. Southwest holds interesting discussions with its customers on Twitter; not necessarily related to travel. Comcast has put its service personnel’s photo on its Twitter account & he offers you any help or support you require. Home Depot, too, uses Twitter to offer alternate customer support.

Twitter has a character limit of 140 – which is its best feature. Short, snappy and easy to follow is what makes Twitter work. So if your brand is not Twittering, you may be left out. Dell, Starbucks, many NGOs, are all out there finding out what their customers are doing right now, and how to engage them in a profitable conversation.

Google is feeling the heat and till it cannot buy up Twitter, it is also using it to its best advantage. Now Google provides a service whereby marketers can send their five most recent Tweets across the AdSense network. Intuit is one of the first to experiment with it. It works like this – when you see the advertisement of Intuit’s Turbo Tax, you click on it and you go to the twitter page, not the company’s official website. The idea is not to drive direct sales but to get people to “follow” Intuit. Once you befriend them, you can convert many into loyal customers.

Marketing is changing. Marketing is, after all, about communicating, and the way people are communicating with each other is changing. So rules of the game have to change. No one wants to be “Marketed” to nowadays. So if you really want to make a headway into new markets, you gotta stop marketing & start talking.

About Me

Rajita Chaudhuri is the Dean , Center for Higher Education @ IIPM. She is the Consulting Editor of '4Ps,Business&Marketing' magazine and 'MYOD'. She is the winner of the "Best Faculty in Marketing".Her passion is teaching.

Prof. Rajita Chaudhuri speaking at 'Thorns to Competition' book launch

IIPM 4Ps Bschool Quiz with SRK

Prof. Rajita Chaudhuri's Executive Communication Class - April 2011

Prof. Rajita's Class on Team Building

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